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tv   Bloomberg Markets Asia  Bloomberg  June 11, 2018 9:00pm-11:00pm EDT

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>> donald ump is adjusting his jacket, arranging his tight as he walks into the hotel. now both men ar at the hotel. it is a few seconds until 9:00. both of them are going to be money shothat handshake that will be plastered across your television screens and newspapers around the world once that happens. trump -- they will get down to the nitty-gritty is tired -- donald trump tries to iron out denuclearization. all eyes are watching singapore. the next hours are going to determine where the strategy, if it will happen in history, in the asia-pacific.
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if something happens in terms of a breakthrough, this could change the course of a strategy for asia and the u.s. we see the u.s. flag and the north korean flag side-by-side. who would have thought we would be seeing this so soon? those two men are meeting eminently. -- imminently. yvonne: that shot itself is dobolic, even if we things takes down the road or not. it seems like everyone was ready to go into business, and get into the nitty-gritty of things. both of them having a tough face leading into the capello hotel -- capella hotel.
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koreans plan to leave later on this afternoon. negotiations have escalated to a point that was faster than koreans, but the north that theyictating could be here for the photo op, and they got that legitimacy when it comes to being on the international stage. kevin, final thoughts? kevin: just to see president trump walking in, his face 25 minutesression, after tweaking news of his senior economic adviser's heart attack -- tweeting news of his senior economic adviser's heart attack.
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a moment to no one thought possible and now the hard work truly begins. yvonne: any more intel on kudlow? kevin: his lower-level staffers are caught offguard. it is 9:00 new york time. thatknow the importance larry kudlow plays within the administration. someone that was working in the media before this. in common inot terms of personality with president trump, someone very the international trade agreement on behalf of the administration. he takes a more pro-free trade approach and world feel. -- worldview.
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yvonne:'s decision was it to make it a one-on-one meeting? president trump? kevin: president trump would prefer to have the individual meeting. typical deal one-on-one with a head of state. the president recently did meet with prime minister abe of japan. >> we will break in right now. you are seeing live pictures of the historic can shake. -- h >> can't quite catch what they
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are saying. you saw that handshake, the one the world is watching this morning. brief, the body language seems friendly. there is a bit of smiles between president trump and kim jong-un right now. they are going to be heading into that one-on-one meeting. th are spending the last few couple of minutes with their interpreters, then bring in the united states and north korea and delegation -- korea delegation, and toss a couple of capellatthe -- the hotel. the body language seems off to
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be a good start. i want to bring in our anchors from bloomberg markets to bring in our special coverage of the summit. you have been watching through what other high -- headlines are coming through in the next couple of hours. a kinm has already won in way. he wanted recognition as a globr and meeting the president of the united states is a statement of that. ge,to see the body languate, leaders notes, the really smiling at first, but then we saw warm reaction from both of these leaders. they will meet for about and froms, one-on-one, there be joined by their senior delegation.
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accompany kelly will president trump, along with john bolton. kim jong on will be accompanied by his top foreign minister -- jong-un will be accompanied by his top foreign minister. the white house essentially rolled up the red carpet for utis top foreign minister -- o the red carpet for this top foreign minister. kim jong-un will be addressing publicly not only the u.s., but the world. is there a way to know what really was discussed? covering kimmber
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and trump and hearing the concerns of republican leaders, when there would be concerns frhin the republican party when he would have introductory talks wi other republican leaders, about how those negotiations would happen. and i heard some senior republican aides concerned before the plane -- before they got on the plane over here. picturese seeing live of a photo opportunity between president trump and kim jong on those one-on-one talks -- kim jong-un before they happy one-on-one talks. they are taking questions from reporters. let's listen in.
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[speaking foreign language] waye had obstacles on the forward, but we overcame all of them, and we are here today. >> thank you very much. thank you.
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>> thank you. you. >> a lot of things going on inside the hotel. answering questions from reporters, president trump and kim jong-un. we heard, we will have a terrific relationship, from president trump. he seems very optimistic. we have comeaying this far and we will be able to overcome the obstacles leading up to this summit.
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>> i am not sure they have overcome anything right now. a lot of l back in the united swionderi this putsly -- if pressure on president trump and a firministration to get commitment that north korea will commit to long-term denuclearization. there will be a sighting of the peace treaty on the north korean peninsula, but the president has said he will have a verifiable system in place to make sure he would be able to check whether they have them. he also has a list of sanctions to put on north korea should they not cooperate. the white -- sources at the white houe lasset
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tok, they would be able shift some parts to encourage economic development and north korea. it is unclear what the framework will be. yvonne: president trump spoke to kim, saying, we will have a relationship, kim saying we are your after overcoming everything. -- here after overcoming everything. stephen, what did you make of this exchange? stephen: i watched the body language quite closely. presidenthe dmz when moon met kim, and a different dynamic. not like the meeting of these leaders, where they embraced each other several
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times, and kim jong-un on brought president moon across the border into the north. they were very happy to see each other. kim jong-un was diffusive in his love of the moment and saying he was full of emotion as he walked into the dmz. we can't go back to the way things were before, he said. he called it a "warm spring." i know it is early in this meeting between trump and kim jong-un on and there has been -- ng-un and there have been ds, a lomore distrust between these two gentlemen than president moon and kim jong-un. let's see how the morning goes. it was not as warm as the moon-came greeting.
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>> i noticed there were side smiles, but not directly to the camera. as our reporreg out, now comes the biggest test in the most risky part. those leaders are by themselves to speak, aside from translators. willext 45 minutes or so be the point where they will figure out what is going to happen, if anything. be interestingl to see what qualcomm of the -- will come of the final statement. will the united states be able to get irreversible disarmament or denuclearization? or is it going to be watered down? trump, has he instructed his officials to not
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sign the joint statement of canada? we don't know. now comes the hard part. yvonne: updates, here. the two leaders have arrived at the capella hotel. we saw the historic handshake. i want to hand it off to our bloomberg market reporters. >> aisc day. cbid will be in the joint agreement, we don't know. we have indications this will be the first step in the process. it will not make it less successful. that, the broader of a sitting u.s. president meeting with the north der,a leader, a young lea someone trying to map out his
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place in the region, sifting through a rapidly changing u.s. foreign-policy -- starting now seeing that happen in real-time, this is something that will long-lasting implications, not just terms of u.s.-asia policy in theion, but the way in which foreign diplomacy is conducted on behalf of the united state that is what we are watching literally unfold. >> let's bring in our anchors in hong kong and sydney who will be joining us fordaybreak: asia." this very historic day. handshakes, three for four -- or four, body language -- rish?
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rishaad: there were certainly first when it came to this meeting between president trump korean leader. they seemed a little bit cold at first. they have allowed 45 minutes between themselves to chat, only in the company of interpreters. >> to be a fly on the wall for that conversation. this one-on-one widens -- there will be representes from both sides, and a working lunch, and a press conference in about eight hours time. it is interesting, the protocol and the body language. they were -- there were smiles coming from the north korean leader during a meeting with the press.
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no sitting u.s. president has ever been in this position. we have been talking a lot about the takeaways. , from a markets point of view, hopefully one of calm. maybe not a lot of substantial after thebut calm negative headlines of the g7. and we had the breaking news about 45 minutes ago, larry kudlow reportedly suffering a heart attack. president trump is dealing with a lot on his plate. you are seeing pictures of the singapore,el in where the u.s. and north korea leaders are currently involved in their one-on-one meeting, accompanied only by their interpreters, for another 45 minutes.
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about, what are they trying to get out of this? regime preservation for the north korean side? donald trump facing a want of domestic pressure, he had -- there was -- a lot of domestic pressure, there was the tweet sayingrni saying if -- he is wasting his time when it comes to north korea. he is also trying to make changes to top military leadership. that is an indication he wants a better grip on decisions. engle atng in stephen the kabbalah hotel-- -- capella hotel. what does president trump expect from his leadership at this point in time? stephen: the understatement of
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the year is coming from kim jong-un on. he said it was not easy for us to come here. not on down on a 747, his private plane. calling donald trump a "dotard," and donald trump firing back all kinds of rhetoric, "little rocket man" and the like. and also, threatening want him, the mainland tonight is dates, -- united states,hey have come a long way to reach this point where they can shake hands and have half smiles at least in the opening image. that is outside the
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capella h somber expressionsotel. -- hotel. somber expressions all around. we should see the departure of donald trump in about three hours after a working lunch. a guesttalk about risk, from goldman sachs, a former minister from south korea, all of that is on the way. this is bloomberg. ♪ >> welcome back.
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the moment the world has been waiting for, the handshake the world has been waiting for. the body language, warm enough, not fuzzy. haidi: we did get a ready smile is that press conference room, the north korea leaders saying it has not been easy for him to get here. senioraking news, the advisor to the president on
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economics, larry kudlow, suffering a heart attack and is now in the hospital in washington dc. shaad: this picture is just coming through, moving to the upside, by a fraction. nikkei 225, up four-tenths of one percent. hanseng, slightly moving to the downside. people trying to figure out what is going on. we have this historic meeting today between donald trump and the north korean leader, center stage. know what theump north korean leader is all about? he said he would be able to do so in 60 seconds.
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has he made up his mind already? get some kind of perspective. guests with us. richard, this goes beyond a photo op. this in itself is significant. kim will go home happy if nothi ee haen today. minimum -- they got the minimum of what they came thisresident trump will tweet for all it is worth. has been taken seriously by his decades-old enemy, the u.s. even if today is a complete
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disaster, both men have gotten enough to declare victory from their respective positions. people? campaigned onp the notion he was the best negotiator in the world. hisctors, they are a bit of an easy. -- uneasy. th fstof that meeting where president trump said he would be able to side up kim jong- he might make the wrong judgment call, make some type of agreement in the short-term that does not benefi it states from a longer-term notion. minimum, both of these two leaders are getting what they want. the question for many americans
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is whether or not kim jong-un got more? did, that could pose a significant risk for the united of how thisrms would water down diplomatic relations in the region, and how denuclearization must occur. a.m., president trump's motorcade arrived at the capella hotel, the site of the summit. the president tweeted news 10 minutes later, his seniormost economic advisor had a heart attack. larry kudlow is now at walter reed medical center. later, the5 minutes president walked into that summit after kim jong-un
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arrived. then we see the body language, the smiles of these world leaders, now the meeting is underway. we are expected to hear from president trump himself following this expanded delegation. pompeo, and kelly are with president trump. >> we talked about south korea may be getting more. how would we know? >> if there is any sense sanctions are going to be lifted, north korea does not have to give much on its nuclear program. we don't fully know what north korea's nuclear arsenal will look like. realre likely to see maybe even john
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bolton set off the smoke alarms at the end of the meeting. hearts, he does not really want this to happen. the secretary of state, mike is more ready to throw all of the pieces in the air and see what happens. john bolton is much more traditional, hawkish in the republican party. thesn't that remarkable, seniornt taking two advisers of the ashley different worldviews and bringing them a veryr fors -- different worldviews and bringing them together for this specific meeting? secretary pompeo, trying to edge out john bolton from these
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negotiations. the former secretary of state, rex tillerson, having a tough relationship with president trump, putting it mi ldly. it says something about trumps diplomatic style he would bring them together. detrimental,e tting two different versions from two different people. >> that is what the president likes. people talk about him thriving on chaos. you saw him in canada over the weekend. he hates that kind of thing, stuck in a room with multiple people. of unbearably conspicuous ability -- virility, he has to deal with the seriousness of angela merkel, not his scene.
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the focus is on him, one other, his way of doing things, key people like pompeo and bolton on this is the president at his most comfortable and he will be loving every minute. >> how important is this to get cbid in the agreement? it seems too much to agree to in a first meeting. mike pompeo said yesterday they have a system in place to verify what ever north korea would agree to. i remember last week at the white house, president trump said if all goes according to plan, he will be willing to have the north korean leader to the white house.
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that would only be the first of several meetings to come. the "washington post" reporting larry kudlow is reportedly doing fine, citing his wife, after his heart attack. >> cbid? >> there is a roadmap to get there. two-yearlking a minimum before that can be achieved. >> it could take up to 10 years. >> it could take forever. in terms of what both men want out of today, i don't think that matters. that is kind of down the road. in the presid', that is a lifetime away.
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at the nuclear disarmament deal and the presidential decision to withdraw. many folks around the world were trying to forecast what it would mean. would the u.s. hold more firm to its view with toxin north korea -- in its talk with north korea? officials argue this puts the united states in a stronger position. >> it is about commitment. signed the deal today -- what happens after? -- north korea does not have a good history when it comes to following through. >> a poor history. we have to try to evaluate whether this north korea leader is different from his father and and grandfather.
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he has gotten farther than they have and has turned the dial up far enough to get to this meeting today. president clinton almost certainly would not have agreed to this meeting until we were way further down the road on to their disarmament. this shines quite well on kim 's leadership with north korea and ability to interact with the united states. we have to look at this denuclearization as a long way down. this is about presidential theater today for both men. china, not talk about the invisible hand of china. , i talked about him ready to burst in. president xi may be ready to do
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the same. >> we saw a measured response withegard to what president trump thought xi's role was within all of this. the united states was not satisfied with the immigration issue on the north korea- china border. trump offered measured comments he wassident xi, saying satisfied overall. ok at the bilateral trade negotiations happening with the united dates and china. -- united states and china.
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there are many back in the u.s. who fear this is summit is a potential political bargaining chip in the u.s. bilateral trade talks. measureda very president trump in terms of the last 24 hours in singapore. kim clearly wanted to add some trump clearly wanted to add to some type of theater within the last 24 hours, he is touring the twon. -- the town. >> [laughter] >> there are more than 2500 journalists watching him take a selfie with the foreign minister singapore, and kim is saying, i am the thirtysomething
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dictator trying to project something as well. >> more to come. rish? rishaad: let's have a look at what is happening in trade. market-wise, a bit of a mixed bag. david? david: the open was a bit interesting. slightly lower. seng.lower on the hang not pushing towards session highs. 300, 37.19. dollar china coming up a little. higher.en is pushing
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cross, you want to watch the yen-yuan cross. if it starts to point higher, we are in trouble. dollar we's is on the swiss on the way up. call option the expiring in two days, june 14, at a strike of 230. -- 320. we are a little bit higher compared to yesterday. markets are betting this continues to move higher. that is another sign of markets right now. there is a major benchmark here with the nikkei 225, moves in the dollar yen. 23,000. australia is opening up after
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being shut yesterday. we talk about premium discount, there. meetst be odd for you to the person who w gng to ki you a few weeks o. [laughter] this, it isst about political and geopolitical. let's look at what is front and center with markets and banks. fed tomorrow. the ecb on thursday. the question is what they say and whether they will come up with a timeline. the italian finance minister permitted the euro, so a little acrossa bed =-- bid
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the euro. the boj comes out on friday. what what they say, not they do as much. the commentary comes out midafternoon on friday. the second half of this week maybe contains more markets moving. -- market-moving. a triple-lot of central-bank decisions coming up. tliv-go to get expert analysis. plenty more to come. president trump and kim jong-un in their one-on-one meeting. ♪ >> a quick check of risk
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appetite of across the markets. we then get into this potentially historic summit with president trump and the north korean leader. they are having one-on-one talks, accompanied only by interpreters. waiting on the outcome. 110jpy holding on the handle. we have two sessions of u.s. stocks putting on gains. a bit of positivity going into the u.s. opening. let's get back to the big story, maybe the year.
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president trump meeting came at the summit. progress,ial for which could affect the world's biggest sources of geopolitical tensions over the years. whether they get a deal or not, it is historic. how are you looking at it? we don't have huge expectatiothis meeting. because it is difficult to predict. many experts tkd about it. consensus is that this event is predictable. >> you are the head of north korean research. we have talked about the discount. that is something we are waiting to see. how would we ever know what it
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was? if this all goes well and everything is hunky-dory, we should know. the risk premium pricing last are in april, remember? and in september and october? there was concern something could happen. you look at the cds. south korean volatility, there is risk premium priced in. there has been a move downward over 45 basis points the last two days. you look at what happened to korean discount equity markets, scenario, a blue sky where everything breaks through, normalization.
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beppens, there could geopolitical conrns. rishaad: and a further strengthening of the yuan, meaning euro returns would be better if you are a foreign investor/ . whenever we would see a rocket south korea would defend its talks. what is happened to them? >> you look at north korea military actions, the market discounts the significance for a while. jong-un ratcheted up military escalation, the market noticed that, but even in that
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that, buttice did even in that case we did not see huge investment impact. some investors took head positions, bu since october, it subsided. the market hasn't moved much today because it has already discounted the risk of military conflict significantly. there could be upside going forward, but this summit, quite -- we areble, and keeping an eye on implementation. bige could be a breakthrough toward denuclearization, a roadmap, and
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a market might want to see how they go through with this. haidi: i want to throw out this quick chart to talk about exuberance in part of t assets. creating risk there are companies that have a pretty dim growth prospect in south korea, but they really rallied over that second meeting between kim and president moon, where there was talk of infrastructure needing a refreshing. areass your best case in if we have a positive outcome from the summit? how quickly can sanctions be rolled back? long do you expect it will take before you see business flows come throu now, market expectation
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quite bullish. we're probably looking at a roadmap at best. keeping those expectations low, i don't see huge market reaction without a joint statement, even if the summit produces a tangible outcome. how would that affect the markets, it would take a while for the market -- rishaad: a breaking story concerning larry kudlow. he is reportedly doing well. at the the scene
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capella hotel. outand trump have come after thr summit, 35 minutes , after ahereabouts discussion, accompanied by their interpreters. the tool go for a short walk around the summit site -- two will go for a short walk around the summit site. this is the scene at the capella hotel. , seniorrry kudlow economic policy adviser to donald trump, doing well after a heart attack, says his wife to the "washington post." weight tomp on his the -- way to the venue tweeted about it.
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in singapore, one of our reporters has a couple o qutions. you were talking about the best case scenario. how about the works -- w orst-case scenario? if north korean assets were to get softer, there would be impacts on dollar funding premiums. >> there would be some impact on but thereity markets, is also very short-term market movent, happening in korea right now. there was anxiety from the market last year about trade,
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but when it comes to a trade there is huge concern some point about geopolitical risk, but now that there is these , the nuclear issue, even if that is a worst case scenario, i don't think it will have a huge, lasting impact on the market. it would not be a negative surprise. the implications are not just for south korea. they are also for japan. there was a pricing in for the second day a win. what are the implications you see for japan and its assets?
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>> i am not a geopolitical expert. towill be difficult for me figure out the implication geopolitical markets or assets. i can say based on our many conversations with clients, the market will more focus on the boj and ecb meetings, etc., even if there is disappointment in the meeting's outcome, the market will hold back until the end it -- bigger picture comes the given the market experience with regard to geopolitical risk in korea, i don't think the effects will be everlasting.
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maybe i am too optimistic, but that is the feeling i get from investors. draw your attention to the picture being seein singapore. we are seeing this bilateral meeting. let's take a [indiscernible]
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>> thank you very much, everybody.
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rishaad: close to the cameras, now. donald trump saying they will work together. our guest is still with me. you say you are not a geopolitical expert, but you can't help be taken by these images. what does it mean for the people of korea? >> this is quite a historic moment. -- of the most can double, tangible outcome of all of these processes is the start of normalization -- the normalization of the relationship between south and north korea. this is a process. it might lead to reunification.
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based on my conversations with thatpeople on the ground, is probably 10 or 20 years from now. very eager to think about german style reunification, given there are differences between the german case and the korean case. >> has there been a saving up for it? >> the challenges are much bigger, given the number of people into the income differences between north and south korea. >> beijing and washington, with regard to trade. that friction may also play a role. beijing has skin in the game. gooshoon: at some point in time, markets will more focus on the audi issue because it has a
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direct impact on their portfolio. tourist companies in china -- concrete issues that have affected the price. equity, $30 billion $50 billion, affecting the issue. there is the potential upside if things normalize between north and south kore haidi: in terms of the beneficiaries of this relationship, china has to be a big one. it was amusing that anecdotally there has been a big surge in injuries in prices in the bordering city, whether it is a good plan to get in before the opening up. do you see beijing or china broadly as being one of the biggest benefactors?
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there was some anecdotal information. the fact is the south korean government has planned to invest heavily on north korea infrastructure, and that is part of the creation. again, when and if a deal is reached to remove or reduce yuan sanctions on north korea, i think south korea will be one of in first to invest heavily north korea. according to our estimation, if, again, this is a blue sky scenario, if everything goes very well then you could have .1% impact on korean gdp, or .2% of gdp. but that movement would not be enough for the central bank of korea to change the rate policy.
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but going forward beyond the short-term, obviously we're theing about, you know, in eventual full integration between south korean and north korean economy, south korea's $500export is between billion in $2 trillion to invest for the next 10 to 20 years. that is quite significant. rishaad: thank you so much for joining us. head of research for korea at goldman sachs. just coming through at the moment, i look forward to working forward with it on you. this is tall trump to kim jong-un. there we go. what have you got for us? >> it looks like optimism.
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the headline, it is good for peace. seems to be a lot of optimism and willingness between trump and kim. this is a historic summit. a lot is hanging on the balance, given that we have north korea, whose economy is pretty much seen as a poor economy needing a lot of help and investment giving the longtime international sanctions that it habeen under. so a lot of pressure on the economy. i want to bring in our chief nor the asia correspondent at capell we were told earlier that the meeting between the two men was supposed to end at 10:00 local time, which is five minutes ago. what have you heard, what are you seeing? they were just walking around the compound earlier. >> it looks as though they are still talking. heardinteresting with
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from kim jong-un saying we have overcome speculation on this summit but at the same time we are also hearing did not answer a direct question about denuclearization. all that speculaonbout the summit, there was some speculation about his it would happen the most has been around the issue of denuclearization. is he not going to talk about it? we are not so sure. he said some nice words to donald trump. kim jong-un said it was not easy to get here. there were obstacles but we overcame them to get here. also donald trump said we are working together, we will solve the big dilemma, we will have a terrific relationship, i have no doubt. so they are saying the right things. but when they get across the table as they have been in this opening our in addition to the walk around the facility which you see behind me here, the capella hotel, they cannot ignore the elephant in the room, and that is denuclearization.
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because that is the strong point that the united states is insisting on and it really is linked to what the north koreans want. these americans get secessions from the north --eans, perhaps they can get then they can start talking about potential sanctions relief. it all comes back to the big d word, denuclearization, and the permit -- commitment and timetables that potentially kim jong-un can offer up. >> we have heard a lot of generalities, a lot of niceties so far but nothing to do with denuclearization. we will continue to wait and see. stephen engle right outside the capella hotel. china is not an active participant in this summit and is heavily invested in the outcome. let's turn to tom mackenzie in beijing for a look from this angle. what would be the best result
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for china's leadership? you well know china has long called for pyongyang and washington to sit down and have talks. of course that is now exactly what is happening. yo saw -- you have thought on that front china would be optimistic in this shift away from the threat of nuclear war we had six months ago or so. there is a key caviar which china will be concerned that pyongyang gets too close to washington, so they want to make sure that is not an outcome that comes to pass. it would be -- weakening of the south korean and u.s. alliance, that is something that may come about in the medium to long-term. weird from the u.s. defense secretary seeing the troop situation would not be discussed at the initial talks.
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of course it should be pointed out that china will be keen as well to get involved in any economic opportunities in north korea should a peace process take part, or unfold on the back of these talks, particularly around infrastructure. in and been reporting along the border between china and north korea and the impact the sanctions have had just on those communities. to see al be keen pickup of those trade flows should these talks progress in a positive manner. nice one, just to tell you what we have coming up, we have more from what is going on in singapore. plus from north korea talks, decisions of three big central banks. they have their hands full this week. some are talking about it being the biggest week for markets of the year. we're going to talk with john was. next will be speaking to
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former south korean foreign minister about what his country hopes to hear and hopes to gain from this summit. this is bloomberg. ♪
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>> welcome back. this is where it is all happening. the historic summit between kim and trump. both have met at capella hotel, about three miles from here. they shook hands and smiled for the cameras. well.s from reporters as a prehtoric day. -- a pretty historic day. it has so many firsts attached to it. the summit is underway. the word denuclearization is
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more than just the elephant in the room. president trump and kim jong-un, apparently very different ideas of what it means. >> it will be very easy for me to make a simple deal and claim victory. i want them to get rid of their nukes. >> complete, verifiable and irreversible. that is the president's ultimate aim. kim will bring what is being armed a phased approach, rejection of the so-called libyan model, and a demand the u.s. removes his own nukes from the region. trump has indicated flexibility. but he will still want to see pyongyang agreed to some sort of timeline. haidi: joining us now is yoon young-kwan who is south korea's former foreign minister and now a professor. great to have you on for us.
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just trying to get a gauge with the little information we have, the body language, the smiles from the north korean leader, that balcony shot as they went for a walk. how does that change or not change or expectations of outcom fthe summit? yoon: i t so far they have been doing fine. the body language seems to be friendly. i thinkomethingill come out of their discussions about what to do, this important issue of denuclearization. so i'm looking forward to results. there will be something, i think. do you expect a compromise or agreement could be reached on the concept of denuclearization, particularly if the u.s. is going in with wanting to complete irreversible dismantlement, verifiable as well.
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is that a level of standard that north korea is willing to meet yoon: yes. been koreans have not yet clear whether they are really -- i thinthe fact that they decided to meet with each other thatngapore today shows there might have been some agreements achieved between two parties. so if they can produce some agreement and we get some roadmap and timetable, that would be regarded as a successful summit to meeting. in addition, if north korea north with the u.s. that korean nuclear warheads and icbm's are taken out of north
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korea into a third country like the united states, that would be regarded as a great success for this summit meeting. but i do not know yet whether had that kind of goal aied meeting, two or threea meeting or not. professor, we have been here before. we have previously had negotiations. is there anything differt this time around compared to previous attempts? yoon: yes, very different because this is the first time that u.s. president took a political approach to this issue, on denuclearization of north korea. so far the u.s. administration tended to focus on a narrowly dealed military security
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instead of trying to cover the korea'ses of north problem, which is high-level distrust. north korea is a small and weak country surrounded by big powers, and that has made north koreans paranoid about their own national security and developed nuclear weapons. alleviate thiso kind of paranoia of north korea by having some kind of context, high-level context like this one. a person to person meeting between the leaders. fori think president trump, the first time in 20 or 30 years of diplomatic negotiations with north korea, began to take this
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--d of lyrical approach and political approach and try to tackle the root cause of the problem, high-level mutual distrust. i think that should be the ginning diplomacy in order to resolve this complicated issue. professor, president moon jae-in had a very active role to get the leaders to read, to get trump and kim together to talk about denuclearization. for south korea, what is the minimum it helps will -- hopes will come out of this meeting? will it be enough to sign a deal agreeing to the end of the? of the korean war? yoon: basically both sides can timetable,oadmap and for example, if both sides
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agreed that the key portion of denuclearization is being completed by the end of 2020. u.s. provides a some kind of security guarantee and economic aid to the north korean si, that would be great. there may beile, some measures being taken, like declaration of the end of the korean war, which is significant in terms of improving political relations between three parties, south korea, north korea and the united states. we koreans mean, will be happy to see both sides the korean end of war formally appeared and if -- formally.
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and if for example the u.s. opens an office in pyongyang or establishes an office in washington dc, that would be very welcome by south koreans. it means the beginning of a new period, and beginning of an important process of denuclearization and peace settlement on the korean peninsula. rishaad: professor, you mentioned distrust and the problem has been mutual distrust for years. how do you build trust again? how do you achieve that and how difficult is it that given over the past year, this war of words wouldn the two of them, you trust donald trump or kim jong-un in getting anything done here? yoon: i think yes, and this is not an easy problem.
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leaders,owever, both kim jong-un and prident donald tump, are equally eager ohave some kind of deal between the two. the decision to meet face-to-face like this is the beginning of a process of andcing the tension removing, the lowering down of the level of mutual distrust. so this is a good beginning in that regard. some leeways be provided to north korea if north korea decides to make some important concessions, like
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taking some nuclear warheads out of north korea. intrusiveng inspections. portions ofe key the whole process of deke of denuclearization. if north korea makes these kinds of key decisions come i think we establish a lyon is on -- or declaring the end of the korean war, or some lessening of economic sanctions or something like that. on,hat kind of process goes i think they're made the trust building 20 countries. professor, thank you so much for joining us today. , former foreign
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minister of south korea. you can have a look at all this and more, get analysis from our various experts. also you can get out go function. we will get you back to singapore and look at what is going on, all the latest news. but let's have a look at the countries that are in the heart of all this and look at the democratic split between the north and south korean's. this is bloomberg. ♪
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haidi: this is bloomberg markets: asia. investors are waiting the outcome of the u.s. north korea summit in singapore. fell to the three-week low but we take that as a signf optimism about reduced geopolitical tensions. market also has three major decisions are from the three big central banks to look out for this week. let's get more from mark cudmore. is there a sense that the markets don't want this to be a disaster? if it is better than g7 they can probably accept it and move on. mark: i think it is more than that. this is not been a market story at all yet. it's obviously an amazing media story but it will become a market story when we see concrete steps for denuclearization, peace and
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sanctions relief. until those timelines are defined it is very much a media story. the markets are going about their business separately. the last week or so has overall been generally positive for markets. a little bit of turmoil. even the g7 this weekend, expectations were so low that it was no surprise. that is why we didn't see much fallout from that, either. rishaad: i suppose it is all about the interest rate decisions coming through. a huge week for markets. we have been talking about the biggest week for the markets for the whole year or thereabouts. i think it is completely misplaced unless they are talking them the world cup starting and volatility. i think there are a lot of news events this week. it is really important for investors to establish what is a news event and what is a market
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event. the really big market event might be the ec. to a lot of uncinty about what they will dlare. veryc be meeting will be exciting. we are unlikely to get exact confirmation if it will be one or two this year. really the one we need to watch is u.s. tpi tonight and the ecb thursday, and the world cup starts thursday as well. rishaad: and of course we have meetings on the sidelines taking place with various people and vladimir putin. mark, thank you. you can find more on thattory at the markets live blog. you can get a run down in one click and analysis from bloomberg's expert editors. it is well worth looking at. quick check of business flash headlines. for 17by the hsbc chief
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billion dollars into expanding key asian markets and improving technology has failed to inspire investors. growth modet into after restructuring targetin hong kong in southern china in particular. push: gentiles anti-smog making plans to announce a merger. regulators want to combine oil and gas pipeline assets owned by three energy giants before the northern winter. one path is for private capital injection ahead of an ipo. rishaad: speaking of i the o's, chinese smartphone maker considering raising half of its proposed $10 billion ipo from mainland investors. they may seek $5 billion from the sale of cdr, chinese depository receipts. offering shares here in hong kong, it will depend on demand and may still change before that
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debut. coming up, now that the trump kim summit is underway we are looking at other markets. we're going to ♪
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haidi: 29 in pyongyang. haslinda amin we are awaiting the discussion between trump and kim. let's see if anything comes out it. for now, paul allen was first word news in sydney. 's toppresident trump economic advisor has suffered a mild heart attack. the president tweeted that larry kudlow is in walter reed and is doing well. larry kudlow has been a longtime confidante of the president and accompanied him to last week's g7. the acrimonious meeting ending with kudlow backing up the president irritation.
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secretary of defense james mattis has suggested u.s. troop levels will not be on the negotiating table and singapore. he says any discussion about reducing the soldiers in south korea would strictly be between washington and seoul. questions about troop levels rose after u.s. officials repeatedly said the trump administration is willing to offer security guarantees to pyongyang. theresa may is in advanced talks to head off a rebellion by pro-european members of her departed conservative party. the brexit secretary says they back compromise amendments on customs arrangements with the eu. the legislation goes to parliament on tuesday. she faces pro-eu rebels and pro-brexit campaigners. malaysia says it has uncovered -- as the new government moves to expose state corruption. an aid to the prime minister says he has found indications of multiple criminal breaches of
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trust at state institutions. at least $7 billion went missing at 1mdb. the government expects widespread losses elsewhere. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm paul allen. this is bloomberg. >> thanks that. nowp and cam are talking with their expanded teams of negotiators, but how concerned should investors be about the historic summit? rish is going to take us through some of the comments we have heard. one,ad: we have got this having a look at these and checking the market mood, the yen falling to three-week lows as president trump met kim jong-un. ate is the chief economist the mitsui banking corporation. some optimism seems to report
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sentiment -- risk sentiment. having a look at the chief investment officer at advisor alliance. much more likely to be market moving. the fed meeting and the ecb meeting the following day as well. there is a look at the yen and 10 year, hovering around the 2.5 yield. gold, another flight into safety. the yen trading on 110. we can bring in john was, chief -- john woods, chief investment officer for asia-pacific at credit suisse. he is with haslinda and singapore -- haslinda in singapore. haslinda: [laughter] that's right, i am here with john woods. we have the fed, the ecb, and of course the summit between trump and kim.
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let's start with the lion city. it has not been market moving news, but that is not to say the market is not watching. they don't want any crisis or the talks to fall through. >> you are right, this event has been discounted to the point where any good news out of it i don't think is going to be particularly important. frankly i don't even think a disappointment would have a material effect. the event hasl been signaled sufficiently such that it has been discounted effectively. for us, the big question, this week is the ecb, not so much events in singapore. haslinda: the ecb, what are you looking at it for? >> as you know, we have had a couple of governors with speeches over the last few weeks, essentially signaling a hawkish --
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in our view, that has not been reflected any meaningful way in risk premia. any announcement that the tapering could come sooner than anticipated would potentially have an important impact, particularly on the euro. we are looking at that event in this very important week as a potential source of new news that might impact markets. haslinda: so what assumptions are you making? are you anticipating it to come sooner rather than later? >> our house view is the actual tapering will come in december. we are also keenly looking at this meeting and the one in july as a possible indication of this formal swing to a more hawkish focus. for us, that would have a profound implication on the value of the dollar, because it seems to us that the likelihood of a tighter military policy in
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europe, and frankly our expectation of an upswing in growth accelerating over the second half has not yet been reflected in the dollar. we think weakness in the u.s. and strengthen the euro is a more likelseoutcome over the nd half of the year. rishaad: i am sure a behind-the-scenes they have been talking about starting to end qe in europe. this would be the first time the party will officially admit they are doing so and they have started a dialogue. how important is that for investors? >> i can't hear anything. has, if you can hear me? haslinda: rish was just asking about a potential end to qe. the expectations of that coming to the end of draghi's term. what are you anticipating? >> we think it will be announced
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, start playing through in december. we think it could have a potentially profound impact on market pricing right now. i think it is all a reflection of the euro-dollar cross. we think the euro has further to appreciate and the dollar has further to weaken. within that overall view, you have a huge amount of impact particularly in emerging markets and here in asia. for us, this is one of the most anticipated and look for events over this week. in our view, a potential recalibration by the ecb toward its monetary policy. haslinda: when you take a look at inflation, growth, they don't seem to be heightening. >> absolutely right now. i think that is the case. we have definitely had evidence of softness in the first and second quarters, not only
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europe, but all around the developed markets. we think that soft patch is coming to an end. we think we will start to see growth we accelerate over the course -- growth re-accelerate over the third and fourth quarters and we will start to see every pricing of interest rate expectations, more so than we are now. this, we believe, will lead to a weaker dollar outlook. haslinda: i think one of the challenges right now is draghi's replacements. some are saying it could be a hawkish governor. perceive that eventuality? >> it is too soon. tos is five minutes anticipate the swing in monetary policy based on personality. i am pretty suwhoever comes will be absolutely data-dependent. these are forecasting issues we are talking about, our expectation that growth will react salary -- well
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re-accelerate. but we remain obviously data-dependent in our view and anticipate that we will see some moderate strengthening in the european growth story over the coming quarters. haslinda: we saw a fallout at the g7. does that worry you and how will it play out in the markets? >> it has potential impact, i guess. , a lot oflp thinking this, particularly on the u.s. part, is posturing. we saw an awful lot of parties burnt over the u.s. trade conflict in the first half of this year, and kly has not come to a huge amount of import. there has been an awful lot of negotiation. i suspect something similar will have an with the eu and canada and the u.s.'s major trading pars. i suspect the u.s. goes in
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strong and concedes and moderates once it feels it has a reasonable confession -- concession. i would not be surprised if we see something similar. haslinda: nafta negotiations continue despite posturing. >> absolutely. one can feel it is part of a broader effort by the united states to secure slightly more advantageous trade positions. haslinda: how about the boj? some say it is a nonevent. >>he view e will be no change as well in the boj. inually, we are overweight terms of the house view precisely for that reason. a feel there is still potential upside both in capital gains from that position, and onversely, we are negative the states and across the eurozone. for that reason, we think there is more upside and a likelihood the boj will remain flat. haslinda: you seem comfortable
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and a lot of investors seem comfortable. the underpricing risk. could you be miscalculating the risk? >> yes. i mean, inevitably there is a risk to the view, quite naturally. there has to be a risk to the view. ultimately, our services on brexit, our expectations we will ion in theelerat markets over the next six months is a view. it is one we are looking and believing we are seeing early evidence and leading indicators of. if we were to have an acceleration in geopolitical risk -- i did mention the trade war's -- such that a break was put on that momentum, that would be a risk to our view. on that basis, we would probably see a reversal of some of the trends we have been anticipating, particularly the
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weak dollar, as the interest rate differentials became more pronounced. haslinda: thank you for joining me in this blistering heat. john woods, chief investment officer at credit suisse. thank you so much for that. rish, back to you. or is it haidi? haidi: i will take it from here, thank you so much, haslinda in singapore with john woods. let both those guests cool off. we have had so much analysis on bloomberg. if you want to catch up, you can use our interactive tv function at tv on the bloomberg. watch us live and catch up on previous interviews, do a deep dive into any securities on the bloomberg function. you can take a look at that. pivotal, historic moment, that handshake between president trump and north korean leader kim. you can become part of the conversation here. send us instant messages during
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our show for a bloomberg subscribers only. check it out at tv . this is bloomberg. ♪
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haidi: this is bloomberg markets: asia. i am haidi lun in sydney. a quick check of the latest business headlines. bsg has agreed to a $7 billion acquisition of maus of germany, a deal championed by warren buffett. usg excepted an offer of $44 a share, which rose from $42 after berkshire hathaway supported the bid. the deal has the virtue of ending what buffett has called a disappointing investment. rishaad: germany's online marketplace addressing its ipo at the top end of the range, aiming to raise billions of dollars, giving it a market value of something like $3.6 billion with this stock set to
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begin on june 19. the company was built by focusing on smartphone users. they have now more than 10 million monthly active customers. haidi: masayoshi son's vision fun has set up a $250 million investment in a california-based data storage firm. the funding also includes cisco, hewlett-packard, and sequoia capital. the total equity raised his $410 million. the company coith data storage companies such as dell and commvault systems. rishaad: let's get you back to the singapore summit and kim jong-un saying it can be a good prelude for these -- peace. but what would piece look like? david, what is your reading of the situation thus far? david: what is interesting is
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the talk of whether they will sign a peace pact or not. i think if you sign a peace pact at the beginning, you have a risk, undermining the reason why you have the alliance with south korea with troops on the border with north korea. so if you undermine the reasoning for that and those troops start to go away before the denuclearization process -- it allows them to keep their nuclear weapons while you are reducing the troops or something like that, which puts japan south korea into an invidious situation. what do they do if they start to worry the nuclear umbrella is going to be removed? did they get their own nukes? how does china and india react, or pakistan? this is one of the issues that needs to be sorted out. when is the peace process -- how does it work? it probably needs to be the end of the process rather than the beginning or during. rishaad: complete, verifiable, irreversible.
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that is what the demand is. what would that look like in reality? and will it happen? david: mike pompeo -- i thought last night's briefing was interesting because mike pompeo was absolutely clear that this was something that would take place -- the sanctions relief would take place at the end of the process. in a way, he was putting pressure on north korea to commit to doing something. university at linden covering international relations made the points that by putting the pressure on to the north koreans, they are looking for probably a transition period which is short -- and two years until the end of drums presidency -- certainly not the libyan model, which was months. i think it will be interesting to see if the cbiz is in the communiqué once it comes out. if it is, it will signal quite a big victory for the trump side.
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haidi: we are just getting these lines through, reaction to the ongoing talks from japanese prime minister shinzo abe, saying he hopes the trump-kim talks succeed. i suppose it plays into the broader idea of how mcan they actually get done and half a day of talks. the way that kim has been brought into this role of statesmen, giving that he is the leader of a regime with one of the worst human rights records. actually have to deal with him. at the beginning of 2000, there was an argument on the u.s. side when george w. bush came into power that you don't negotiate with evil and that is how they viewed the regime. in this case, they have had to swallow their pride and negotiate because he has put into a position of great
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power. he is an actual existential threat to the united states. could be in a couple of months depending on the nuclear missile program. you would not want to actually be bluffing on that one. that is testament to how much andr kim has at the moment how much negotiating power he has in this summit. expect or we can should be looking for, any commitment to a long-term goal -- andclearization without the actual detail, because they are not going to be able to sign the details right now, but if they can commit themselves and put the detail to the working groups who are going to negotiate that in the months ahead, that is going to be pretty significant. rishaad: the two people next to kim jong-un, one is a korean diplomat.
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the other one caused controversy because he attended the 2018 closing ceremony of the winter games and was said to be responsible for the killing of 48 naval soldiers -- david: on the warship, yes. he is the guy also who delivered the letter to donald trump from kim. we saw him in washington last we we also saw him meeting mike pompeo and looking out of the window at the new york skyline. he is a senior advisor to the kim family. he started life as a bodyguard and slowly worked himself up. he is really a self-made man, not a bristling -- princeling. he is not related to the previous regimes. he has made himself indispensablrough merit. rishaad: is anybody indispensable, i wonder really? david: well, yes. then you have the foreign minister. he does come from a princeling
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family. he is famous because he is the guy who suggested at the united nations last year that if the north koreans needed to do anymore nuclear tests, they could potentially do a hydrogen bomb test over the atlantic, which really put the wind in their sales. this was at the united nations. he is the other guy in the room. there are four p the kim side. haidi: david, a huge amount of pressure to come a way with deliverables. we talk at length about this. that was david tweed, bloomberg government reporter. we are waiting to see what comes out of this historic summit. our coverage of the singapore summit continues. let's take a look at the tictoc team, taking a look at the key meetings between the u.s. and north korea and how we wound up at this point. this is bloomberg.
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haidi: what a momentous morning so far. haslin that's right. we are keeping a watch on the meeting after lunch. the two leaders will be having lunch together or are having lunch right now. whether we will have an agreement that both can sign on, we have to wait and see. guests: has, lots of coming on the next hour for bloomberg markets. give us a flavor of what we can expect. continue to try development. we will be talking at length about how this is possibly not market moving news. having said that, we also don't want any crisis that could impact market sentiment.
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coming up, we are speaking to a director for global policy, giving insight into what the agreement may look like, what would be acceptable for the u.s. as well as north korea. china, south korea, and japan, all countries with a vested interest. china called the invisible hand and has a role to play in all of this. rish, haidi. haidi: i suppose that is really one of the questions. can we get some sort of framework for an agreement that satisfies each of those vested interests and parties? ♪ support for kim's
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regime. stocks across the asia-pacific are slinging as investors weighing this historic moment. david: for the very first time in a very long time, the path to peace is visible. we really don't know at the moment how far we get down this path or how long the path actually is. i am guessing right there where you are, apart from it being hot , how is all this feeling? haslinda:


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